CuriosityStream Inc. (CURI) Q2 2026 Earnings Call Transcript

Greetings, and welcome to the CuriosityStream 2nd Quarter 2026 Financial Results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Vanessa Gillins, Senior Vice President of Operations. Please go ahead.

Thank you, and welcome to CuriosityStream's discussion of the second quarter 2026 financial results. Leading the discussion today are Clint Stinchcomb, CuriosityStream's Chief Executive Officer, and Brady Hayden, CuriosityStream's Chief Financial Officer. Following management's prepared remarks, we will take questions from the analyst community, but first, I'll review the Safe Harbor Statement. During this call, we may make statements related to our business that are forward-looking statements under the federal securities laws these statements are not guarantees of future performance but rather are subject to a variety of risks uncertainties and assumptions our actual results could differ materially from the expectations reflected in any forward-looking statements please be aware that any forward-looking statements reflect management's current views only and the company undertakes no obligation to revise or update these statements in order to make additional forward-looking statements in the future. For a discussion of the material risks and other important factors that could affect our actual results, please refer to our SEC filings available on the SEC website and on our Investor Relations website, as well as the risks and other important factors discussed in today's press release. Additional information will also be set forth in our quarterly report on Form 10Q, The recorder ended June 30, 2026, when filed. In addition, reference will be made to non-GAAP financial measures. The reconciliation of these non-GAAP measures to comparable GAAP measures can be found on our website at investors.curiositystream.com. Unless otherwise stated, all comparisons will be against our results for the comparable 2025 period. Now, I'll turn the call over to Clint.

Thank you, Vanessa. As a second quarter was a defining quarter for CuriosityStream. We delivered the strongest quarterly financial performance in our history, including record operating income, adjusted EBITDA, net income, and earnings per share. The results demonstrate what Curiosity can produce when we combine the value of our differentiated content and data assets with our disciplined operating model. In the quarter, high value licensing revenue, reliable subscription revenue, efficient spending, lower year-over-year operating expenses, and a focused cost structure came together to create substantial operating leverage. Revenue was $23.2 million in the second quarter, up 22% year-over-year. Licensing revenue was $14.1 million, up 48% from the prior year quarter. Licensing represented the largest component of our revenue growth in the quarter and highlights the strategic value of the Curiosity Corpus and the multiple ways in which we can monetize it. Today, we're able to engage with leading global media and technology companies through licensing supported by three distinct and durable pillars. First, we license premium factual video to broadcast, pay TV, streaming, cable, satellite, wireless, and other distribution partners. Second, we license highly structured custom and off-the-shelf video and audio datasets to technology companies for AI training. Third, we offer a private code corpus of more than 880 billion tokens for licensing to frontier model developers and coding agent providers for AI training and reinforcement learning, as well as enterprises seeking to fine-tune models after pre-training and general training on closed and open-source large language models. While we believe our private code database offering is the largest available in the world, Simply put, beyond sheer volume, we offer unique software engineering environments containing code, history, decisions, failures, and verifiable outcomes that can improve coding agents through training, RL, and evaluation. We believe these three distinct sources of licensing and intellectual property reduce medium-term licensing risk and create significant long-term upside. They allow us to participate in several large and expanding markets while serving customers with different use cases, buying cycles, and commercial objectives. In response to partner demand, we have also now productized the significant portion of our video library, specifically for AI training. We believe this productization will reduce friction and licensing process, make it easier for prospective customers to identify and evaluate the data sets they need, and ultimately shorten sales cycles. We currently offer 17 off-the-shelf video data set products. These include extensive premium collections covering scripted entertainment, professional and collegiate sports, animation, wildlife, science, automotive, instructional content, as well as highly structured data sets and clips built around high dynamic range video, character tracking, synchronized multi-camera footage merging objects and raw footage importantly we're not simply offering large quantities of video we are increasingly organizing structuring and packaging our IP around the specific requirements of sophisticated AI developers we believe this substantially increases both utility and the value of the underlying content approximately nine million dollars subscription revenue was roughly equivalent to the second quarter 2025 we remain committed to our subscription business into building the long-term value of the curiosity brands and customer relationships at the same time we continue to manage that business for durable economics rather than pursuing growth at any cost our diversified monetization model gives us the ability to be disciplined in customer acquisition spending while we capitalize on high-value licensing and distribution opportunities we also made meaningful progress in improving the efficiency of business. By leveraging AI productivity tools and better aligning our talent base with the highest value priorities, we reduced spending across our primary expense categories. Total operating expenses declined 24% year over year. We expect to make further progress in the second half of the year. This is not simply a cost reduction story. This quarter showcases a more efficient business model in which Curiosity can convert high-value revenue into meaningful profitability while continuing to invest selectively in the content, technology, distribution, and commercial capabilities that support long-term value creation. The resulting profitability was exceptional. Net income was record $8.9 million, up 1,133% compared to $0.9 million in the prior year quarter. Second quarter ETS was $0.15. The Jeff Zivita was a record $11.4 million, up approximately 300%. Margins reflected this operating leverage. Gross margin increased to 73% from 53% in the prior year quarter. The Jeff Zivita margin was 49% compared with 16% in the prior year quarter. Our strategy remains clear. We continue to pursue high-value licensing opportunities that recognize the differentiated value of our extensive corporate we'll maintain our focus on operating discipline including possible marketing investment and rigorous expense management we will continue to build a long-term value of the curiosity ecosystem across established and emerging platforms while simultaneously exploiting existing and new grants of rights that we can monetize I want to thank the entire curiosity team for delivering these results the quarter was a powerful demonstration of the value of our brand, flexibility of our business, and the earnings power of the company made possible by the breadth and depth of our IP. We are pleased with the momentum, but our focus remains squarely on execution and on our longer-term objective, building curiosity into a company that informs, inspires, and entertains, and in sub-billing generates $100 million or more of reliable, recurring, and increasingly predictable annualized revenue. I'll now hand the call over to our CFO, Brady Hayden.

Thank you, Clint, and good afternoon, everyone. Our full Q2 results will be in the 10Q that we'll file in the next day or two. Let me quickly hit some of our second quarter highlights. As Clint said, in Q2 we reported revenue of $23.2 million compared to $19 million a year ago. Likewise, we reported record-adjusted EBITDA of $11.4 million. This is also our sixth consecutive quarter of positive-adjusted EBITDA. We generated a second quarter subscription revenue of $8.9 million, a slight improvement from Q1. Licensing came in $14.1 million, a 48% increase from last year. Second quarter gross margin was 73%, improving from 53% last year, as we were able to generate significant new revenue in the quarter with only minimal incremental distribution costs. Total operating expenses were down by 24.1% as we continue to see the benefits of our ongoing cost rationalization efforts. We reported record net income in the second quarter of $8.9 million, or 15 cents a share. This compares to $0.8 million of net income in the second quarter of 2025. We believe our balance sheet remains in good shape. In June, we paid our regular $5 million dividend, and we repurchased $600,000 of our shares in the quarter. We also prepaid $2 million to fully consolidate the ownership of our German business and buyout or JV partners, Spiegel and Authentic, of their stakes. This transaction officially closed on July 1st and will be reflected in our Q3 results. We did the quarter with total cash and securities of $10.9 million and no outstanding debt. Based on our quarterly dividend of $0.8.5 per share, at yesterday's closing price, CuriosityStream shares provide a dividend yield of about 12%. Looking at our liquidity outlook for the remainder of 2026, we expect to end the year with a cash and investments balance of $17 to $22 million. We expect revenue for the second half of the year to be $38 to $41 million and full year of 2026 revenue in the range of $77 to $82 million. Furthermore, we expect adjusted EBITDA for the second half of the year to be $6 to $10 million and full-year 2026 adjusted EBITDA in the range of $18 to $22 million. With that, I'll turn it back over to the operator to begin our Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. you may press star 2 to remove yourself from the queue for participants using speaker equipment it may be necessary to pick up your handset before pressing the star keys one moment please while we hold for questions once again if you would like to ask a question please press star 1 on your telephone keypad first question Frankie DiLorenzo with singular research please go ahead thank you

It's Frank, but Franky's fine. Very nice quarter of momentum there for the quarter. You talked about the pipeline. Can you give us a little more detail on the pipeline or how that could potentially drive additional AI training and streaming growth related going forward?

Yeah, thanks for the question, Frankie. Yeah, as it relates to our licensing pipeline, it's certainly as robust as it's ever been And what gives us confidence there is, as I mentioned on the call, we have really three distinct and durable licensing pillars that are going to reduce risk and create significant long-term upside that, again, allow us to participate in large and expanding markets while serving customers with different use cases, buying cycles, and commercial objectives. Just to restate what those are, we license premium factual video to broadcast, pay TV, streaming, cable, satellite, wireless, and other distribution partners. So that's an ongoing licensing business that we have forever and delivers every quarter. Second, we license highly structured, custom, and now off-the-shelf video and audio data sets to technology companies for AI training. What we like about these productized off-the-shelf offerings is we believe that will really accelerate sales cycles. We know it accelerates our operational work. And then third, we offer a private code corpus of more than 880 billion tokens for licensing to AI developers and coding agent providers for AI training, reinforcement learning, and evaluation, as well as enterprises seeking to fine-tune models after pre-training and general training on open and closed-source LLMs. So this scope of IP sets us up very well. It gives us the largest pipelines that we've ever had. You know, on the licensing side, it can be a little bit chunky from time to time, but the scope and scale of our offering today I think we believe will enable us to minimize any dips and certainly optimize the semi-transformational upside.

Okay, thanks. Also, could you talk a little more about international? You did an acquisition there recently. Could you talk about the international landscape where you've got to add the potential, We'll maybe expound upon the expansion plans there and the overall potential for the business.

Yeah, thanks for asking. So on the subscription side, we participated in a joint venture with Spiegel Corporation and with a German company called Authentic for the last few years, and we consolidated our ownership of that in the second quarter. So a meaningful component of our cash. Some of our cash went to that. What we operate within the German-speaking territories are two 24-7 ATV channels that have real distribution. We have several redistribution with our fast channels as well over there. And if you look across the world, Germany and German-speaking Europe is our largest non-English-speaking market. And so we like the potential and the firmness of that market for us. And then the nice thing about our content is it's evergreen. It travels well, and a significant portion of our subscribers are international today, and we believe we'll continue to be outside the U.S. as we go forward. And we believe that as we continue to roll out new currencies, new billing and payment systems, we'll capitalize even more on the opportunity outside the U.S. for us.

Okay, thanks. Just one other quick question. I think Disney and a few others have been talking about maybe expanding their streaming offerings, adding streaming from other services, et cetera. Could you kind of talk about that landscape, if there's potential there, and if there's room for that regarding consumer streaming budgets? Thank you.

Well, I think what they're talking about, and we saw it recently with Peacock and YouTube, is bundling. And, you know, we're big believers in bundling entertainment services, and that's something that you can expect us to continue to pursue aggressively. And, you know, we've put some nice bundles in place, it's eight months, And we believe that, you know, over time, those will provide really, you know, sturdy, reliable subscription revenue that helps to maintain our subscription business and also enables us to spend efficiently there. So, big believer in bundles. We continue to pursue that aggressively.

Thank you. Next question, Laura Martin. Please go ahead.

Hey, everybody. It's Dan stepping in for Laura here. My question is, your second half adjusted EBITDA guidance of, what, 6 to 10 million represents a step down from the 11.4 that you guys generated in Q2, does the second half moderation reflect higher customer acquisition, marketing, cost reinvestment, higher content costs, or are you guys just being conservative regarding, you know, assumptions for closing additional licensing transactions. Thank you.

Thank you for that question, Dan, and I would say the latter. We want to take a conservative approach as it relates to EBITDA. As you can see, we're sort of on a run rate for the year based on the first two quarters of $25 million. We've been heavily focused this year on getting our EBITDA up and over $20 million, and I think that we'll monitor that as the second half of the year goes on and, you know, if it warrants kind of making changes to that guidance, that's something that we will do. But, you know, what we like to do is meet and exceed our guidance.

Great. I had a follow-up question, if it's okay. Sure. Let's see. So, you guys had, you know, almost 73% gross margin in the second quarter. and I'm wondering how much of the 38, the 41, and second half revenue guidance is already contracted for by HI training data or how much of that is, you know, can you say is going to be like on new deal expectations in Q3, Q4? Thank you.

Yeah, I appreciate that question, Dan. We have a lot in the pipeline right now. It's hard to project with great precision where our licensing revenue will end up, But if you look at the first half numbers and say, okay, you know, they're $38, $38.5 million for the first half of the year. If you just took our sort of run rate subscription revenue and other revenue out, that's another $19 to $20 million, which gets you kind of in that $58, $59 million range. The low end of our guidance of 77 to 82 would be, you know, kind of another $20 million in licensing revenue for the second half of the year. High end would be, you know, $24 million. You know, we exceeded that this quarter. So we have confidence in getting to those levels. And I talked a little bit about, you know, what we've done from a productization standpoint. We have 17 distinct video data sets today, and that we really believe, and we're already starting to see it, will help to kind of accelerate our sales cycle. It certainly has helped to accelerate our operational cycle. And as we do that, we think that that will make our range certainly a bit more predictable as we go forward. Great. Thank you. Congratulations on a great quarter. Thank you, Dan.

Next question. Jason Pryor with Craig Howell, and please proceed.

Thank you. Maybe I'll pick up where we left off. Clint, you were talking about those 17 new off-the-shelf data products. Can you just talk maybe a little bit more about the, you know, the reception to those products and how that has influenced the pipeline for the second half of the year?

Yeah, thank you for asking that, Jason. And it's not that we're introducing new content, but we productized a significant portion of our library. Again, we have, you know, we control rights to well over 3 million hours of audio and video across, you know, finished programming, raw footage, and, you know, a host of other types of content. And so when we mention these off-the-shelf productized data sets, what we're talking about is, you know, a distinct data set of scripted entertainment, as an example. You know, there's a certain number of hours there. All of the metadata is baked into it. And when I say all of the metadata, like much more significant metadata than in any kind of, you know, video licensing agreement. We have a video data set of professional and collegiate sports, as an example, where you might find well over 100,000 hours of content, and some of which is heavily annotated. Data sets around science and technology, around animation and anime, around automotive, around wildlife. So we've got these really distinct sort of historical categories of premium broadcast video. Well at the same time, we've built and organized data sets around collections like emerging subjects and objects. And so this is, these are like clips built around camera reveals, you know, subjects emerging from forests, water, doorways. We have, you know, high dynamic range video, which is, you know, really interesting, particularly for video gen companies, because today, you know, the model needs to know, these models need to know a lot more than, like, just what does an elephant look like. They need to know, like, what does an elephant look like at noon, at sunset, in the shadow, against bright sky, partially occluded, you know, moving between light and darkness, you know, from different camera positions. So we have these kind of unique categories as well, character tracking, raw footage, and I think if you look at the scope of IP that we licensed in the last quarter, I don't think you can find another company in history that has licensed sort of the scope of content that we have. What I mean by that is you have traditional video to more than 25 platforms and channels, multi-camera synchronized video for AI training, HDR video for model training, millions of tokens of code, you know, for more than 10 sources and languages for training. So, we have customized data sets, and we have off-the-shelf data sets. And that doesn't mean that there's not still, you know, a lot of evaluation and back and forth as we do these deals. But as you productize more and more of your library and of your code, it definitely helps to simplify and accelerate processes that can take some time. Does that answer your question, Jason?

It does. I mean, maybe I'll ask a follow-up here. So last quarter, we had talked about how you're engaging more with maybe a new group of LLMs, and they want to consume content differently than the existing LLMs you're working with. The productization of these off-the-shelf packages, is that meant for this new group of LLMs? Is this kind of the first step in trying to create a monetizable solution for these LLMs? I'm just looking for an update on how that strategy is progressing.

Yeah, and I don't mean to imply that there's, you know, a lot of big new frontier developers coming into the marketplace. I mean, you know, there's seven or eight of those guys, and there's, you know, there's a couple of more that kind of sit on the periphery. But beyond those companies, you know, there are an increasing number of companies who need to license either code or video or, you know, specifically some type of specific video or audio to train their models. So the overall number of companies who are licensing IP, that's expanding. And, yes, absolutely helps, especially for some of the – it helps, you know, across the spectrum, but I think certainly for some smaller companies who might want to take maybe a slightly smaller bite at the beginning than other large companies, it's really helpful. You know, as a company, we just are trying to simplify everything, Trying to simplify everything and trying to just bring a level of velocity to everything. And so that's productization velocity or product velocity, prospecting velocity, operational velocity, sales velocity, acquisition velocity, deal velocity, marketing velocity. If you can't bring the velocity, you'll have a hard time kind of lasting here. And I think that's just kind of true across the media landscape. And we just – I mean, I personally am just kind of – I'm amazed every day at the sort of world that we're living in today. I'm so grateful to be living and operating in this time when there is just, you know, just extraordinary opportunity in front of us. And in our case, we have the opportunity to engage with, you know, the world's largest companies and, you know, many of the most exciting emerging companies.

I'm going to ask one more, just going back to the numbers. Really good gross margin improvement this quarter. Really good cost management this quarter. And maybe reconcile that back to Dan's question, just in terms of, you know, So if we look at the second-half guide, you know, if we continue gross margins where they're at and we continue the cost discipline on OPEX, it seems like that would produce a bigger EBITDA number. So just wondering how we should think about both margins and OPEX as we get into the second half.

Yeah, well, I think you can definitely think about OPEX as decreasing. So a lot of the work that we've done over the last year you'll see in the second half of the year. So, whereas this last quarter, I think our overall expenses were down about 24%. I think if you look at the second half of the year as compared to the first half of the year, there'll be an additional probably, you know, 18 to 20% reduction there in our cost. So, we think that there'll be obviously some, you know, EBITDA opportunity on the cost side. And then, you know, as it relates to the revenue side, there will probably be more rev share agreements in the second half of the year than there were in the first half of the year. And so we just kind of tried to balance out the EBITDA based on those projections.

All right.

Thanks for all the help. Nice job. Thank you, guys.

Thank you. This does conclude today's teleconference. You may disconnect your lines at this time, and we thank you for your participation.